Two thirds (65%) of senior decision makers at UK IT and computing companies which accept and/or send international payments say far too high foreign exchange (FX) fees levied by banks are restricting business growth, according to a new report from global financial platform Currenxie.

The findings highlight the critical role international expansion plays in driving growth – 97% of senior decision makers at IT and computing companies say that increasing international suppliers and/or customers has boosted their profits in the last year.

Operating globally is key to growth which is leading to a rise in IT firms scaling their international client base and remote engineering talent pools to pursue growth plans.

Figures from Statista indicate that the IT offshoring industry generates revenues of $588 billion, an 8% increase from the previous year.

Previous research from employment platform Pebl shows that international hiring is also on the rise in other sectors. Almost nine in ten (86%) companies planned to expand hiring abroad within the next two years, with 48% of business leaders expecting international employees to make up at least half their workforce by 2027.

Figures from Contractor UK highlight the opportunities offshoring IT talent can have on operations and productivity – a company seeking an IT support role typically faces salary costs of approximately £7,000 in Philippines compared to £45,000 for a UK-based hire**.

Given the UK has the third most valuable technology ecosystem in the world and the most valuable in Europe, currently valued at nearly £1 trillion***, it is critical that IT firms continue to pursue international expansion plans to remain competitive.

As well as growing their remote workforce, there is a strong appetite to boost access to customers in new markets. Eight in ten (82%) senior decision makers at IT and computing companies say that the number of markets they sell in has increased compared to 12 months ago whilst 71% say the proportion of international customers has grown.

Three in ten (31%) senior decision makers at IT and computing companies said growing their customer base internationally was one of their biggest priorities. However, geopolitical uncertainty is making two in five (40%) reluctant to expand into new markets whilst half (49%) warn that FX fees are making them avoid expanding further, putting growth at risk.

Similarly, six in ten (57%) senior decision makers at IT companies report their company has increased the number of international suppliers they work with over the last 12 months, potentially looking to boost their supply chain diversification and reduce risk.

Geopolitical challenges such as the Iran war and its impact on key trade routes and the global economy continue to put pressure on IT companies. A quarter (26%) of senior decision makers at IT and computing businesses say that they view increased supply chain costs as one of the biggest challenges to their business over the next 12 months.

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“In a hugely turbulent economic landscape, IT firms are meeting the intense demand for specialized skills and building resilience by pursuing international expansion and entering new markets to meet growth goals,” Sam Coyne, CEO – Europe at Currenxie, said.

“Working with customers and suppliers in new markets is critical to diversifying and mitigating risk – putting IT firms in the strongest position to avoid raising costs for customers, protect margins and fuel growth.

“However, operating internationally can introduce additional challenges with higher FX fees, especially with traditional banks typically offering slow and unreliable international payments which eat into margins. BIT firms can secure a competitive edge by using specialised fintech platforms to eliminate high FX fees and hidden markups, allowing tech firms to settle payments in real-time, preserve their margins, and drive international expansion.”